Yahoo said on Saturday it has rejected a joint proposal from Microsoft and activist investor Carl Icahn that would have involved Yahoo selling its search business to Microsoft.

Yahoo said in a statement that it received the proposal on Friday evening and was given less than 24 hours to accept.

The Internet company said the terms proposed by Microsoft and Icahn were inferior to Yahoo's existing search advertising agreement with Google Inc, and would have precluded a potential sale of all of Yahoo for a full and fair price.